The ________ is useful in evaluating credit policies that a firm extends to its customers.

Name: The ________ is useful in evaluating credit policies that a firm extends to its customers.
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Question

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The average collection period gives insight into how efficiently a company collects its accounts receivable. It is calculated by dividing the average accounts receivable by average daily credit sales. A shorter collection period is an indication of a more effective and efficient credit policy.

The ________ Is Useful in Evaluating Credit Policies That a Firm